However, Asbestospray does not assist this Court's analysis.
In Asbestospray, the record was absent any evidence that the
defendant had a role in the construction of plaintiff's
building. Accordingly, the panel found that defendant was not
entitled to the protection of the statute of repose. Therefore,
without any evidence in the record, it is impossible to
determine what threshold of construction-related activities
would have satisfied the panel in Asbestospray.
The Court finds the "activity analysis" formulated by the
Missouri Supreme Court in Blaske v. Smith & Entzeroth, Inc.,
821 S.W.2d 822 (Mo. 1991) (cited with approval in Herriott v.
Allied Signal, Inc., 998 F.2d 487 (7th Cir. 1993); Witham v.
Whiting Corp., 975 F.2d 1342 (7th Cir. 1992); Herriott v.
Allied-Signal, Inc., 801 F. Supp. 52 (N.D.Ill. 1992)) is more
helpful to this Court on this issue. Using the "activity
analysis," manufacturers of products are protected by the
statute of repose when they engage in "substantial
participation at the construction site in significant
activities in installing or incorporating" their product into
the real property or, alternatively, if they custom make their
product away from the construction site specifically for a
particular project and then install this product at the site.
Allied Signal, 801 F. Supp. at 57-8 (quoting Blaske, 821 S.W.2d
at 837-38) (Emphasis ours).
The Court finds that W.R. Grace did not "custom design" and
"install" the Monokote, nor "substantially participate" in the
construction of State Farm's buildings. The evidence showed
that the Monokote product was sold in bags to the contractor.
The chemical composition of a bag of Monokote fireproofing did
not change from job to job. The contractor (not
representatives of W.R. Grace) then mixed the Monokote with
water in the contractor's own equipment, and then applied the
mixture to State Farm's buildings — again using the
contractor's own equipment. At no stage in the construction
process did W.R. Grace provide any equipment to the contractors
installing the Monokote.
(b). "Act or Omission"
Second, this suit does not allege W.R. Grace was negligent
in any of the "enumerated" activities (the "design, planning
supervision, observation or management of construction, or
construction of an improvement to real property. . . ."
Ill.Rev.Stat. ch. 110, ¶ 13-214) of the statute of repose.
Instead, State Farm claimed W.R. Grace was negligent because:
(1) asbestos was unnecessary in the manufacture and sale of
Monokote; (2) W.R. Grace put no warning label on Monokote
packaging or literature concerning the health hazards of
asbestos; and (3) W.R. Grace conducted inadequate testing on
the Monokote before sale. Because State Farm claims that W.R.
Grace was negligent in its manufacturing-related activities,
rather than its construction-related activities, State Farm
argues that W.R. Grace is exempt from the statute of repose.
The Court agrees.
The proposition that manufacturers receive protection from
the statute of repose only if they are sued for on-site
construction activities appears in both Illinois judicial
precedent and the legislative history of the statute of
repose. In Delta Verwaltungs Raf Gesellschaft Mit Beschrankter
Hafung v. Kenneth Rowe, 1985 WL 2055 at *1 (N.D.Ill. July 5,
1985), the plaintiff employed an architect to inspect a
building that plaintiff intended to buy. The architect's
inspection was negligent, resulting in plaintiff incurring
additional expenses to fix damage that the architect missed.
The architect moved for summary judgment arguing that he was
protected by the statute of repose. Delta rejected this view,
holding that even though defendant was an architect,
plaintiff's cause of action did not arise out of the
architect's failure to perform any of the enumerated acts of
the statute of repose:
Id; McIntosh v. A & M Insulation Co., 244 Ill. App.3d 247, 185
(1993) (plaintiff with asbestosis
was not allowed to proceed against defendants on the theory
that defendants were sellers and distributors of asbestos
containing products); Asbestospray, 247 Ill. App.3d at 262, 616
N.E.2d at 657 ("Other courts have determined that Section
13-214 of the Code would not apply to a landowner where the
action is founded solely on the defendant's status as landowner
. . . but would apply to a landowner being sued for his own act
or omission in one of the specified construction-related
activities"); Hellmuth II, 114 Ill.2d at 256, 102
Ill.Dec. at 416, 500 N.E.2d at 38 (surety not protected by
statute of repose because plaintiff's claim arises out of
breach of contract).
In addition, as mentioned above, Representative Dunn, a
sponsor of the Illinois Statute of Repose Bill stated that the
bill was intended to protect only suits against
construction-related activities: "It [the bill] would apply to
the architect, the engineer, the contractor, anyone who is
involved in the planning supervision, operation or management
of construction, or the construction of improvements to real
property." Transcript of House Debates, May 25, 1979, at
(c). Special Jury Question
Following the liability portion of this trial, at the
request of W.R. Grace, the following special question was
submitted to the jury:
Did W.R. Grace provide design, planning,
supervision, observation or management of
construction services related to the installation
of fireproofing to State Farm Mutual Automobile
Insurance Company in addition to supplying bags
of Monokote 3 and Monokote 4 fireproofing?
The jury returned an answer of "YES."
Nevertheless, the Court finds that this special question is
without legal relevance. In St. Louis v. Rockwell Graphic
Systems, Inc., 153 Ill.2d 1, 178 Ill.Dec. 761, 762,
605 N.E.2d 555, 556 (1992), the court ruled that what constitutes the term
"improvement" within the statute of repose is a question of
law. This decision is tantamount to ruling that the
interpretation of the statute of repose is a matter of law.
Accordingly, for the above reasons, the Court DENIES W.R.
Grace's motion for judgment as a matter of law under the
Illinois Statute of Repose.
(B). Inconsistent Jury Verdicts
W.R. Grace also argues that judgment after trial is
warranted because the jury verdict was inconsistent. First, at
the end of the liability phase of the trial, the jury returned
a partial verdict for State Farm on the issue of negligence.
At this time, the jury also found W.R. Grace not guilty on the
strict products liability Count. W.R. Grace argues that
because State Farm's cause of action focused solely on the
manufacturing activities of W.R. Grace, the jury cannot find
negligence without also finding against W.R. Grace on strict
This argument is without merit. To begin with, W.R. Grace
specifically waived any objections to the facial invalidity of
the jury instructions at the jury instructions
conference.*fn7 In addition, the jury could find that while
the product was not unreasonably dangerous, the manufacturer's
conduct failed to meet the appropriate standard of care. This
is because the negligence theory measures the reasonableness
of the manufacturer's conduct, while strict liability measures
whether the product was defective. Davis v. FMC Corp., Food
Processing Machinery Div., 771 F.2d 224, 230 (7th Cir. 1985)
(citing Kossifos v. Louden Machinery Company, 22 Ill. App.3d 587,
591, 317 N.E.2d 749 (1974)).
Second, W.R. Grace argues that the jury verdict was
inconsistent because the finding that State Farm was 30
percent contributorily negligent is inconsistent with the
jury's finding that State Farm did not know about its cause of
action until 1986. In other words, W.R. Grace argues that the
jury must have found State Farm negligent at the time of sale
and therefore knew of its claim at the time of sale. W.R.
Grace offers no authority to support this position. Moreover,
as stated above, this argument was waived by counsel for W.R.
Grace at trial. In addition, the jury could well have found
State Farm's negligence occurred much later than at the time
of sale of the fireproofing.
III. Motion for New Trial
(A). Standard for New Trial
W.R. Grace next moves for a new trial. The discretion and
authority to grant a new
trial is delegated to this Court and involves this Court
determining whether the "verdict is against the weight of the
evidence, . . . the damages are excessive, or . . . for other
reasons, the trial was not fair to the party moving."
Selle v. Gibb, 567 F. Supp. 1173, 1183 (N.D.Ill. 1983) (quoting
Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251, 61 S.Ct.
189, 194, 85 L.Ed. 147 (1940)). "Rule 59 gives the trial judge
ample power to prevent what he considers to be a miscarriage of
justice. It is his right, and indeed his duty, to order a new
trial if he deems it in the interest of justice to do so."
Juneau Square Corp. v. First Wisconsin National Bank,
624 F.2d 798, 806-7 (7th Cir. 1980).
1. Testimony of Dr. Corn and Dr. Craighead
Throughout this trial, the Court sought to ensure both
parties were allowed full discovery into their opponent's
expert witnesses. On February 5, 1993, the Court precluded
State Farm's expert witness Dr. Anderson from testifying about
his mesothelioma study. The data for this study was based on
confidential (and undiscoverable) health records from the
State of Wisconsin. The Court concluded that though Dr.
Anderson could testify about his opinions in other matters, we
would restrict his testimony concerning the mesothelioma
W.R. Grace now objects to the application of this rule to
its own experts Dr. Corn and Dr. Craighead. During the
depositions of Dr. Corn and Dr. Craighead, each was
specifically asked if they had formed any opinions as to State
Farm's asbestos cross-contamination problem, State Farm's
asbestos operation and maintenance program, the reports and
opinions of State Farm's experts, and the reasonableness of
State Farm's abatement costs. Each expert had no opinions on
any of these areas. Later, before trial, counsel for W.R.
Grace gave information to these experts that allowed them to
formulate opinions on these areas. This strategy by W.R. Grace
effectively prevented State Farm from fully discovering the
opinions of W.R. Grace's experts before trial. Therefore, to
preserve fairness of the discovery process, the Court
determined that Dr. Corn and Dr. Craighead would not be
allowed to testify into areas which they expressed no opinion
during their depositions.
2. Testimony of Kevin Boles and Gerald Karches
On May 27, 1993, W.R. Grace disclosed its intention to call
Kevin Boles and Gerald Karches as fact witnesses during the
damages phase of this trial. These witnesses had personal
knowledge of State Farm's asbestos removal costs,
specifically, the alleged inflated fees of State Farm's
asbestos consultant Hall-Kimbrell. Plaintiff moved to exclude
the adding of these witnesses to the witness list. On July 30,
1993, the Court, by written order, refused to add these
witnesses to the witness list.
The Court reconfirms its July 30, 1993 ruling.
To begin with, these witnesses were added four months after
the final pre-trial conference (held on January 19, 1993) in
this case. At that conference both sides were required to list
their witnesses or be precluded from calling them at trial.
Eight days after the conference, State Farm moved to add an
additional witness who had just testified against W.R. Grace
in another case. The Court refused to allow the addition of
this witness citing: "The Court has no desire to open the
flood gates and allow this trial to be prolonged ad nauseam. No
additional witnesses will be allowed after the final pre-trial
conference." Order, February 17, 1993, at p. 1. Throughout the
trial, the Court enforced this even-handed approach to both
parties — no witness testified who was not identified at the
time of the final pre-trial conference.
Finally, W.R. Grace had at least constructive knowledge of
the J & S and Southwest Hazard problems (the areas that these
witnesses would have testified to at trial) long before the
final pre-trial conference in this case. Indeed, W.R. Grace
included some of the correspondence between State Farm and J
& S on their original exhibit list. Therefore, W.R. Grace's
claim of prejudice or surprise about the J & S and Southwest
Hazard issue, or the claim that these witnesses could not be
identified at an earlier date, lacks merit.
3. American Insurance Association
On April 28, 1993, three months after the pre-trial cutoff,
W.R. Grace sought to add witnesses and documents pertaining to
the American Insurance Association (AIA). Many of these
documents were available to W.R. Grace before the final
pre-trial conference in this case. Nevertheless, W.R. Grace
sought to add witnesses and evidence purporting to show that
State Farm had knowledge about AIA published information
regarding asbestos-containing products when State Farm
constructed its buildings.
At that time, the Court deferred ruling on whether to allow
evidence of State Farm's connection with the AIA. The Court
granted W.R. Grace leave to obtain additional foundational
evidence on this issue. However, the Court warned W.R. Grace
that it would strike all reference to the AIA if W.R. Grace
failed to link State Farm to the AIA.
Finally, on May 4, 1993, the Court instructed the jury to
disregard any information concerning the AIA. A jury
instruction was submitted to the jury during the liability
portion of the trial with the same guidance.
The Court adheres to its previous position because W.R.
Grace failed to establish any foundation or connection between
State Farm and the AIA. Indeed, State Farm produced an
affidavit from the Executive Vice President of the AIA showing
that State Farm was not — nor had ever been — a member of the
AIA. Moreover, W.R. Grace had knowledge of the AIA before final
pre-trial conference. This issue should have been investigated
long before trial began — instead of during the middle of the
In addition, the jury instruction submitted on the AIA was
not prejudicial to W.R. Grace. The Court rejected a more
strongly worded instruction proposed by State Farm. The
instruction given to the jury merely required the jury to
disregard information concerning the AIA.
4. John Walsh
During the damages phase of trial, W.R. Grace introduced
(over objection of State Farm) the testimony of its expert
witness John Walsh. Mr. Walsh's testimony was limited to
projects which he had "personally bid." W.R. Grace moves for
a new trial on this limitation.
W.R. Grace's position is frivolous. On June 4, 1993, the
Court denied State Farm's motion in limine to exclude the
testimony of John P. Walsh during the damages phase of this
trial. It was a close call. State Farm had twice deposed Mr.
Walsh (October 28, 1992 and January 15, 1993). Before both
depositions, Mr. Walsh had been presented with State Farm's
"damage summary" indicating what State Farm would include or
exclude from its claim. Nevertheless, at both depositions, Mr.
Walsh was unable to form an opinion on State Farm's documents
comprising its "damages summary." See e.g. Walsh Depo. 10/28/92
at p. 90.
At trial, State Farm moved to exclude the testimony of Mr.
Walsh because now, after having been unprepared at two
depositions to offer opinions, he now had opinions as to State
Farm's damages. The Court reluctantly denied State Farm's
motion with the caveat that State Farm would be allowed full
discovery during trial of Mr. Walsh's newly formed opinions.
State Farm then sought to depose Mr. Walsh's former employer
Mr. Kynoch. At the behest of W.R. Grace's motion for a
protective order, the Court limited State Farm's discovery of
Mr. Kynoch to jobs that Mr. Walsh "bid personally." Indeed,
W.R. Grace's counsel at the deposition of Mr. Kynoch took the
position that Mr. Walsh's opinions were based on jobs that Mr.
Walsh "bid personally." Based on this position, W.R. Grace's
counsel refused to produce any documents on projects other
than those which Mr. Walsh had "bid personally." Accordingly,
the Court limited Mr. Walsh's expert opinion at trial to jobs
in which he "bid personally."
Now, contrary to its position at the deposition of Mr.
Kynoch, W.R. Grace claims it was prejudiced when the Court
precluded Mr. Walsh from testifying about his experience from
other jobs. The Court finds that no prejudice existed. Though
Mr. Walsh was supposed to be limited to jobs in which he "bid
personally," his testimony was much more expansive and
included his experience
while working on other jobs.*fn8 More importantly, W.R. Grace
cannot now claim prejudice when the limitation on the scope of
Mr. Walsh's testimony was created by: (1) its own motion for
protective order; (2) the position of W.R. Grace's counsel
during the deposition of Mr. Kynoch; (3) Mr. Walsh's lack of
preparation at his first two depositions.
5. Mr. Walsh's Damage Notebooks
During the damages phase of trial, State Farm outlined its
damages in a series of 15 three-ring notebooks. These exhibits
were compilations of invoices incurred by State Farm as a
result of abatement activities.
To rebut State Farm's claim that abatement of asbestos was
necessary, W.R. Grace called Mr. Walsh as a damages expert
witness. As part of Mr. Walsh's trial preparation, he went
through the 15 notebooks and marked which invoices he thought
were not related to the State Farm's abatement project. Mr.
Walsh's notebooks were identical to State Farm's with the
exception that: (1) the invoices were printed on pink paper
(as opposed to white); (2) the invoices were flagged with a
red post-it sticker. Mr. Walsh's series of notebooks were
marked as defense exhibits 1949.1-1949.15. The Court ruled
that these exhibits could be used as demonstrative evidence
only and would not be allowed to go to the jury.
The Court properly treated these exhibits at trial. To begin
with, these exhibits were never timely listed by W.R. Grace on
any exhibit list as part of the pre-trial order. Indeed, Mr.
Walsh admitted during cross-examination that his notebooks
were not prepared until trial. Accordingly, these notebooks
violated the Court's pre-trial order and were properly
excluded. Second, during the liability portion of the trial,
the Court prevented State Farm from introducing evidence that
was highlighted and evidence with tabs from reaching the jury.
The Court insisted that all highlighting be removed from the
evidence (if the highlighting did not accompany the original
production of the evidence to the opposing party). The Court
excluded the highlighted exhibits of Mr. Walsh under the same
(C). Jury Instructions
1. Duty to Warn
The Court charged the jury with the following instruction:
If W.R. Grace knew or should have known at the time
it sold the MK3 to State Farm that its product was
hazardous, then W.R. Grace was under a continuing
duty to communicate such knowledge to State Farm.
W.R. Grace objects to this instruction citing Carrizales v.
Rheem Manufacturing Co., 226 Ill. App.3d 20, 168 Ill.Dec. 169,
179, 589 N.E.2d 569, 579 (1991), app. denied, 146 Ill.2d 623,
176 Ill.Dec. 794, 602 N.E.2d 448 (1992). However, Carrizales
actually supports the Court's position:
Illinois law has been reluctant to impose a duty
to warn beyond the time when the product leaves
the manufacturer's control unless the manufacturer
knew or should have known at that time that the
product was defective.
Id. 168 Ill.Dec. at 179, 589 N.E.2d at 579 (Emphasis ours).
Here, the Court did not impose a duty to warn on the
manufacturer where a manufacturer learns of a hazard
subsequent to the time the product left its control. Rather,
consistent with Illinois law, the instruction imposed a duty on
the manufacturer to warn if the manufacturer had knowledge of
the defective product at the time of the sale.
2. Assumption of Risk
Next, W.R. Grace frivolously argues that the Court's
assumption of risk special interrogatory was in error. This
instruction properly instructed the jury to consider the
assumption of risk defense if it found against W.R. Grace on
the basis of strict liability or negligence. The special
interrogatory also told the jury only to consider the
assumption of risk defense with regard to strict liability in
Ironically, it was W.R. Grace who suggested the necessity of
this instruction. Originally,
the Court submitted its own assumption of risk instruction
because neither party submitted this requisite instruction as
part of their proposed jury instructions.*fn9 Then, at the
behest of both parties, the Court amended the assumption of
risk instruction to the form that was submitted to the jury:
If you find that State Farm assumed the risks
relating to the hazards of the fire-proofing in
its building, enter the percent of fault, if any,
on Special Question No. 6.
Special Question No. 6 states:
As to Count I (Strict Liability), if you find
Plaintiff, State Farm assumed the risk, what
percentage, if any, was State Farm at fault?
Counsel for W.R. Grace assisted in the crafting of the
language of these instructions which both parties specifically
agreed was proper. W.R. Grace cannot now object to the
validity of this instruction.
3. Choice of Repair
State Farm's position at trial was that it should be able to
choose the appropriate method to repair the
asbestos-contamination. State Farm removed much of the
asbestos in its buildings. Therefore, State Farm took the
position that damages should be largely based on removal
costs. W.R. Grace took the position that State Farm should not
have removed the asbestos, but instead should have managed the
asbestos with an operation and maintenance program until
demolition of the building. Hence, according to W.R. Grace,
the measure of damages should only be the cost of the
operation and maintenance program. However, both choices
require the eventual removal of asbestos. Federal regulations
(NESHAPS) require the removal of all asbestos at the
demolition of the building.
The Court submitted the following instruction to the jury:
In this case, the proper measure of damages is
the cost of repair, which is the cost of removing
the asbestos fireproofing and its damage from
State Farm's buildings and the costs associated
therewith. Although you have heard evidence that
all of the asbestos has not yet been removed,
that does not change the measure of damages. The
future cost of removal of the remaining asbestos
should be calculated as well. It is for you to
decide when the fireproofing should have been or
should be removed.
The owner of damaged property has discretion to
decide how to fix the damage to the property. He
may choose the repair method which he deems to be
best suited to the restoration of its property to
its pre-damaged state. . . .
This instruction was crafted from two parts. The second
paragraph of the instruction was proposed by State Farm. The
first paragraph was drafted by the Court over the strenuous
objection of State Farm at trial. W.R. Grace never proposed
any instruction on this issue. Nevertheless, W.R. Grace now
objects to the second paragraph of this instruction.
The Court's instruction was proper. First, the instruction
is firmly grounded in Illinois law.*fn10 Northwest Commerce
Bank v. Continental Data Forms, Inc., 233 Ill. App.3d 124, 174
Ill.Dec. 249, 251, 598 N.E.2d 446, 448 (1992); United States v.
Peavey Barge Line, 590 F. Supp. 319, 323 (C.D.Ill. 1984) aff'd,
748 F.2d 395 (7th Cir. 1984).
Second, W.R. Grace suffered no prejudice. The Court gave
W.R. Grace wide latitude to argue that a building owner such
as State Farm should have managed the asbestos in place
instead of promptly removing the fire-proofing. Even though
W.R. Grace never offered a jury instruction, the Court added
the last sentence to the first paragraph of the instruction in
light of W.R. Grace's position at trial. In any event, there
is nothing inconsistent
with the two paragraphs. Paragraph two addresses the method of
repair (removal vs. operation and maintenance). Paragraph one
deals with the timing of the repair (e.g. must the asbestos be
removed now or at demolition?). W.R. Grace took every
opportunity to argue to the jury that State Farm should have
managed its asbestos in place until some later date in the
future when the building is inevitably demolished. The jury
4. Nominal Damages
The Court also refused to submit a nominal damage
instruction to the jury. This refusal was appropriate.
First, the jury did not consider any evidence in the damages
phase of the trial that nominal damages are appropriate.
Unlike the one case W.R. Grace cites in support of its
proposition,*fn11 the position of W.R. Grace throughout the
trial had been that the measure of damages should be the
operation and maintenance costs of containing the asbestos. At
a minimum, the expert witnesses for W.R. Grace testified that
this cost would run into the millions of dollars. Given W.R.
Grace's position, and the fact that W.R. Grace never submitted
any evidence to the jury that damages would be nominal, the
Court properly refused the nominal damages instruction.
Second, during the liability portion of the trial, the jury
found that: (1) State Farm's properties were damaged; and (2)
that the negligence of W.R. Grace was a proximate cause of the
damage to State Farm's properties. Where property "damage" is
proved, compensatory — not nominal — damages are inferred.
See Rosario v. Livaditis, 963 F.2d 1013, 1021 (7th Cir. 1992)
("A finding of liability for violations of RICO is
conspicuously inconsistent with an assessment of zero damages
for those violations since the jury was required to find that
the class suffered an injury to business or property before
finding the debtor liable."); Gavcus v. Potts, 808 F.2d 596,
97-99 (7th Cir. 1986) ("Nominal damages can be awarded when no
actual or substantial injury has been alleged or proved, since
the law infers some damage from the unlawful entry of land. . .
. To allow only nominal damages under the circumstances
presented because of lack of physical harm would permit the
trespasser to enjoy the benefits of his tort without fully
compensating Plaintiff for his loss."); Stirs, Inc. v. Chicago,
24 Ill. App.3d 118, 320 N.E.2d 216 (1974).
Third, the Court took judicial notice of the NESHAPS
regulations in our January 14, 1993 Order. In that Order, the
Court stated that the NESHAPS regulations would serve to
establish the guidelines for assessing damages. Because the
jury found W.R. Grace negligent in supplying asbestos, it
necessarily follows from NESHAPS that State Farm must
eventually remove the asbestos prior to demolition. This
removal cost will warrant more than a nominal damages award.
Ergo, for the above reasons, W.R. Grace's motion for judgment
after trial, and alternatively, motion for new trial is DENIED.
The Clerk is directed to tax costs in this case with the entry
of this order.